Pacific Bell may hike rates for high speed

Wendy Tanaka, OF THE EXAMINER STAFF

Published 4:00 am, Tuesday, April 9, 1996

1996-04-09 04:00:00 PDT CALIFORNIA -- Pacific Bell said Monday it hoped to raise rates on its high-speed ISDN phone line service by $8 per month beginning this summer in order to offset higher-than-expected costs to install the service.

The phone company said in a statement that the hike, a change from an earlier request to double per-minute usage rates, resulted from a ruling by state regulators last month that changed how Pac Bell and potential new competitors could charge for the service, which is popular with Internet users.

Thus, Tom Bayless, Pac Bell's ISDN manager, said in a statement, "Our (previous) request proposing an increase in usage to help us cover our cost of providing the service is no longer viable."

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Currently, Pac Bell charges $24.50 per month for ISDN lines in homes and $26 per month for those installed in businesses.

ISDN (integrated services digital network) is technology that transports data and voice over phone lines at more than four times the speed that standard copper phone wire can move information. Most often, customers rent ISDN lines for their computers.

Some in the high-tech industry have been fighting any increase in ISDN rates, saying higher prices could slow growth in the number of subscribers and hinder business opportunities for high-tech companies.

"Shouldn't be more than $20'

"We see ISDN as creating opportunities for businesses," said Dhruv Khanna, a senior attorney at Santa Clara-based Intel Corp., one of the tech firms that has been fighting the rate increase. "Any rate increase for ISDN will deter customer subscription to the service. ISDN shouldn't be more than $20 for the flat rate."

Khanna suggested that Pac Bell wanted to raise its rates because it didn't anticipate such high demand for the service and needed to slow down interest in the product.

Bayless didn't comment on Khanna's assessment but said Pac Bell had not expected such a surge in subscribers, who currently total 65,000, more than twice the number the utility had at the beginning of last year. Bayless estimated that the number of ISDN subscribers should jump past the 500,000 mark by 2000.

Last December, Pac Bell filed a request with the state Public Utilities Commission to increase ISDN rates by doubling per-minute usage fees from 1 cent to 2 cents.

But on March 13, Bayless' statement said: "The PUC's order moved ISDN into a competitive product category. In this category, the rules for how the product should be priced require that each component of ISDN (i.e., usage, monthly fee and installation) be priced separately, and that each component be priced to enable us to recover our costs. As a result, the various components can no longer subsidize each other."

Higher per-minute rate unpopular

The amended proposal "reflects concerns we've heard that raising the per-minute charges would have a significant impact on our heavy ISDN users," the utility said.

The new plan "will enable us to provide the service at a monthly rate that is still among the lowest in the nation," Bayless said.

"I can't say whether the whole package is good for consumers," he said. "It's definitely not a bad thing.

"One concern for consumers is will (Pac Bell) still cap the free usage to 20 hours a month? If they do that, it will be very expensive to plop your kid in front of the computer instead of the TV." &lt;